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Model Building

Are justice facilities and public–private partnerships a natural fit?

The price tag of a $250 million development project is bound to attract attention. But when that project also involves public–private partnerships to finance it, design and construction professionals should take notice. In this case, the project in question is a massive 3,500-bed jail and court complex in Indianapolis, currently out for development proposals, whose total cost may end up somewhere between $200 million and $500 million. Yet even with that hefty price tag, city and county officials are hoping that the project can be designed, built, and funded without raising taxes, by leveraging private resources instead. It’s a model that is increasingly being used to fund correctional facilities worldwide.

Public–private partnerships, also known as PPPs or P3s, are contractual agreements between a public agency (federal, state, or local) and a private sector entity (usually a company or corporation). The two entities share their resources to push the project forward to completion, with benefits in the end for both of them. For one thing, public agencies use this process to find greater access to private capital and usually a more efficient process (especially over the project’s full lifecycle), while private organizations get to increase their portfolios and profit potential. Under most P3 configurations, the private entity designs and constructs the building, maintains it for a set period, and leases it to the public entity. Then, at a future date when the public lease has expired, the private entity gains full ownership and can do with the property what it wishes.

As the P3 project delivery system gains traction in the United States, observers often cite Canada, Australia, and Europe as successful early adopters in the last decade. And certain building types may be better suited than others for a P3 approach, which really works best for large-scale buildings that have a complex set of programmatic requirements. Correctional facilities fit squarely into that category, and some architects are taking notice.

“We have known for quite some time that the delivery method for corrections and other justice projects has been changing and evolving,” says Linda Bernauer, AIA, a project manager with Dewberry Architects. Bernauer is also the current chair of the Academy of Architects for Justice, an AIA Knowledge Community devoted to correctional and justice facilities.

“Over the last decade, many design/build and design/build/operate projects have been constructed throughout the U.S.,” she says. “The obvious next step is P3s.”

The potential downside for architects working in a P3 delivery model, however, is that they are no longer the owner’s agent-advocate or the primary design professional. Instead, they have found themselves (in previous P3 examples) in a subcontractor role to the developer or financier. One of the principal drawbacks of this arrangement is that it may diminish the architect’s ability to positively affect outcomes or respond to owner concerns and programmatic needs.

At the same time, the P3 model also may allow firms to diversify their skill sets and go after new work.

“P3 breeds an opportunity for architects to serve in owner–advisory roles [on the front end],” says Michael Brenchley, AIA, a senior vice president with HDR Architecture, which has worked on several P3 proposals and projects. “There’s risk in P3 delivery, but there’s risk in our traditional delivery methods as well. When we look at the competitive side of P3, we still find that design innovation has its place.”

The number of these proposals seems only to be growing. Recently, the city of Long Beach, Calif., utilized a P3 delivery system to open a $492 million state justice facility, which contains 31 courtrooms, administrative offices, a detention center, and leasable commercial space. Long Beach’s example is catching on. Officials in Houston and Multnomah County, Ore., are also looking into a P3 for new justice facilities, in addition to the new complex in Indianapolis.

Stephen Carter, founder of CGL, an international planning, design, and financing firm that specializes in correctional facilities, says that while fewer than 5 percent of current correctional bed spaces are being developed this way, P3 justice projects represent a much higher fraction of the marketplace in terms of financial worth.

Going forward, Carter says, owners and developers will have to rely on very sound evidence-based architecture briefs on the front end to define the functional and financial needs for correctional projects. Architects are essential to that process. “Architects need to understand that if they’re going to get into correctional work [in this environment], adjustments to the way they’re going to market and perform their work will be essential,” he says. “It’s happening faster than most of us realize.”

Learn more about the AIA Academy of Architecture for Justice at aia.org/aaj.